UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 39169 / September 30, 1997
ADMINISTRATIVE PROCEEDING
File No. 3-9470
:
:
In the Matter of : ORDER INSTITUTING PUBLIC
: PROCEEDINGS, MAKING
HELEN A. ROY, : FINDINGS AND IMPOSING
CHRISTOPHER E. BEIMEL, : REMEDIAL SANCTIONS
WILLIAM P. HOGAN, :
BRUCE W. BATLEY, :
DANIEL D. BEIMEL, :
JOHN W. FORD, :
JOHN T. JARVIS and :
LOUIS A. MILLER :
:
:
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate and in the public interest that administrative proceedings be
instituted pursuant to Sections 15(b) and 19(h) of the Securities Exchange
Act of 1934 ("Exchange Act") against Helen A. Roy ("Helen Roy"),
Christopher E. Beimel ("Beimel"), William P. Hogan ("Hogan"), Bruce W.
Batley ("Batley"), Daniel D. Beimel ("Daniel Beimel"), John W. Ford
("Ford"), John T. Jarvis ("Jarvis") and Louis A. Miller ("Miller").
In anticipation of the institution of these proceedings, the above-
named Respondents have each submitted an Offer of Settlement ("Offer")
which the Commission has determined to accept. Solely for the purpose of
this proceeding and any other proceedings brought by or on behalf of the
Commission or in which the Commission is a party, and without admitting or
denying the findings contained herein, except as to jurisdiction, and the
entry of the permanent injunctions described in paragraphs II.L. through
II.N. below, which are admitted, Respondents by their Offers consent to the
findings and imposition of the sanctions contained in this Order
Instituting Public Proceedings, Making Findings and Imposing Remedial
Sanctions ("Order").
Accordingly, IT IS ORDERED that proceedings against Helen Roy, Beimel,
Hogan, Batley, Daniel Beimel, Ford, Jarvis and Miller be, and hereby are,
instituted.
II.
On the basis of this Order and the Offers submitted by the
Respondents, the Commission finds that:
A. At all times relevant to this proceeding, Helen Roy has been a
registered representative and registered principal associated with Penn
Capital Financial Services, Inc. ("Penn Capital"), a broker-dealer
registered with the Commission and headquartered in Penn Hills,
Pennsylvania.
B. Penn Capital Management, Inc. ("PCM") was incorporated in
Pennsylvania in February 1991. PCM was the parent company of Penn Capital
until April 1994, when Philip F. Roy Jr. ("Roy Jr.)", Helen Roy's son,
became Penn Capital's sole owner.
C. From April 1994, when he purchased Penn Capital from PCM, until
his death on April 24, 1995, Roy Jr. owned Penn Capital and controlled its
operations.
D. From December 1993 to October 1995, Beimel was a registered
representative associated with Penn Capital. After Roy Jr.'s death on
April 24, 1995, Beimel became chief executive officer of both PCM and Penn
Capital.
E. From March 1991 until September 1995, Hogan was the president and
a registered principal of Penn Capital, and managed Penn Capital's daily
operations.
F. From March 1994 to October 1995, Batley was a registered
representative associated with Penn Capital.
G. From April 1994 to October 1995, Daniel Beimel was a registered
representative associated with Penn Capital.
H. From March 1991 until April 1994, Ford was the president of PCM
as well as a registered principal of Penn Capital.
I. From March 1991 to at least September 1994, Jarvis was a
registered representative associated with Penn Capital. Jarvis was also an
officer of PCM.
J. At all times relevant to this proceeding, Miller was an insurance
broker with Consumer Insurance Advisors, Inc., an insurance agency. He
acted as a broker-dealer in selling purported securities of Roy Plaza while
The findings herein are made pursuant to the
Respondents' Offers and are not binding on any other
person or entity in this or any other proceeding.
======END OF PAGE 2======
not registered with the Commission as a broker-dealer and not associated
with any entity registered with the Commission as a broker-dealer.
K. Roy Plaza is a small strip shopping center located in Penn Hills,
Pennsylvania. It is an unincorporated entity, which at all material times
was owned by a trust established in 1991 by Roy Jr.'s parents. At the time
of his death, Roy Jr. was the sole beneficiary of the trust. Penn Capital,
PCM, and other affiliated and related entities all conducted business in
office space located in Roy Plaza.
L. On February 24, 1997, Final Judgments and Orders were entered
against Helen Roy, Beimel, Batley, Daniel Beimel, Ford and Jarvis by the
United States District Court for the Western District of Pennsylvania, in
Securities and Exchange Commission v. Penn Capital Financial Services,
Inc., et al., Civil Action No. 95-1571, pursuant to their consent and
without admitting or denying the allegations in the Commission's Complaint.
The Final Judgments and Orders, inter alia, permanently enjoined these
Respondents from future violations of Section 17(a) of the Securities Act
of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-
5 thereunder.
M. On February 24, 1997, a Final Judgment and Order was entered
against Hogan by the United States District Court for the Western District
of Pennsylvania, in Securities and Exchange Commission v. Penn Capital
Financial Services, Inc., et al., Civil Action No. 95-1571, pursuant to his
consent and without admitting or denying the allegations in the
Commission's Complaint. The Final Judgment and Order, inter alia,
permanently enjoined Hogan from future violations of Section 17(a) of the
Securities Act, Sections 10(b), 15(c)(1) and 17(a) of the Exchange Act, and
Rules 10b-5, 15c1-2, 17a-3 and 17a-4 thereunder.
N. On February 24, 1997, a Final Judgment and Order was entered
against Miller by the United States District Court for the Western District
of Pennsylvania, in Securities and Exchange Commission v. Penn Capital
Financial Services, Inc., et al., Civil Action No. 95-1571, pursuant to his
consent and without admitting or denying the allegations in the
Commission's Complaint. The Final Judgment and Order, inter alia,
permanently enjoined Miller from future violations of Section 17(a) of the
Securities Act, Sections 10(b) and 15(a)(1) of the Exchange Act and Rule
10b-5 thereunder.
======END OF PAGE 3======
O. The Complaint in the Commission's civil action alleges that, at
various times from February 1991 through October 2, 1995, Beimel, Helen
Roy, Hogan, Daniel Beimel, Batley, Ford, Jarvis, Miller and, until his
death, Roy Jr., participated in a scheme to defraud public investors of
their money through the offer and sale of securities, and through which
they raised over $3.1 million from at least 100 investors. The defendants
offered and sold what they claimed to be securities in PCM and Roy Plaza.
Investors were solicited through Penn Capital, where Beimel, Hogan, Daniel
Beimel, Batley, Ford, Jarvis and Roy Jr. were employed. At the behest of
Roy Jr., Miller, an insurance broker who was not associated with Penn
Capital or licensed as a securities salesperson, also solicited investors
to purchase so-called Roy Plaza securities, thereby operating as an
unregistered broker-dealer.
P. The Complaint further alleges that, in order to induce investors
to purchase the securities, several of the defendants made false and
misleading statements about the nature of, and the degree of risk inherent
in, the investments. In reality, the securities did not exist. Investor
proceeds were commingled in bank accounts and disbursed to the defendants,
Roy Jr., PCM and Penn Capital. Much of the remaining money was used to pay
earlier investors, in the pattern of a classic Ponzi scheme.
III.
In view of the foregoing, the Commission deems it appropriate and in
the public interest to impose the sanctions specified in the Offers.
Accordingly, IT IS ORDERED that:
A. Helen A. Roy be, and hereby is, barred from association with any
broker, dealer, municipal securities dealer, investment adviser or
investment company.
B. Christopher E. Beimel be, and hereby is, barred from association
with any broker, dealer, municipal securities dealer, investment adviser or
investment company.
C. William P. Hogan be, and hereby is, barred from association with
any broker, dealer, municipal securities dealer, investment adviser or
investment company.
D. Bruce W. Batley be, and hereby is, barred from association with
any broker, dealer, municipal securities dealer, investment adviser or
investment company.
E. Daniel D. Beimel be, and hereby is, barred from association with
any broker, dealer, municipal securities dealer, investment adviser or
investment company.
F. John W. Ford be, and hereby is, barred from association with any
broker, dealer, municipal securities dealer, investment adviser or
investment company.
======END OF PAGE 4======
G. John T. Jarvis be, and hereby is, barred from association with
any broker, dealer, municipal securities dealer, investment adviser or
investment company.
H. Louis A. Miller be, and hereby is, barred from association with
any broker, dealer, municipal securities dealer, investment adviser or
investment company, with the right to reapply for association after five
years to the appropriate self-regulatory organization, or if there is none,
to the Commission.
By the Commission.
Jonathan G. Katz
Secretary
======END OF PAGE 5======